British Gas has hiked its electricity prices by 12.5% – sparking fears other companies may follow suit.

The energy giant said 3.1 million customers would be hit by the rise but said it would credit £76 to the accounts of 200,000 vulnerable consumers.

The Centrica-owned company was the last of the so-called Big Six suppliers to raise its prices since January and there are fears the move may push up prices further.

Tony Chester, of Future50 gas supplier Zog Energy, said, while his expertise is with other fuels, he thought the move would spark further rises.

“It is the way the market tends to go,” he said. “I know wholesale electricity prices have been going up and there are additional costs coming into the industry – most providers have started smart metering now which is a cost.”

British Gas said its electricity prices would go up on September 15 and would mean an average dual fuel bill for a typical annual household tariff will rise by £76 to £1,120 - a 7.3% increase.

Anna Moss, of Future50 energy consultancy Cornwall Insight, said the rise came against a backdrop of wholesale energy prices still recovering from a spike between December 2016 and March 2017. She said: “This is the final price rise from large suppliers since EDF Energy first increased its prices at the start of January. Small and medium suppliers will see this as an opportunity to gain market share and may update their tariffs in the coming weeks to capitalise on the increase in switching which is likely to occur.”

The government has warned the hike could hit the most vulnerable who were already on poor energy tariffs – although British Gas has said it will give £76 credit to 200,000 vulnerable customers who receive the government’s warm home discount. This view was echoed by Community Action Norfolk chief executive Jonathan Clemo who said those on the tariff should consider switching as they were already getting poor value. He said: “A price rise will create bigger bills and electricity is clearly not a luxury item. While £76 a year might not cause too much pain to many of us, for the most vulnerable in the community it is a significant ask – especially when many other costs of living have gone up and wages have not. We don’t want people to not heat their homes or cook dinner because of the cost of it.”